A Land of Magical Thinking: Becoming a Millionaire

I saw mention of this statistic in a blog comment last week, and went looking. Here is the central faith-based delusion regarding The American Dream:

Belief: 45% of Americans think it is somewhat or very likely that they will become wealthy in their lifetimes.*

Fact: in 2005, 5.7% of households were worth a million dollars or more. (Source PDF. See Table 3.)

Understand: A million dollars isn't even close to "wealthy." It represents, say, $40K to $60K a year in income.

So:

Chance of being wealthy: One in twenty. At best. Only 1% of households had more than $5 mil.

Perceived chance of being wealthy: One in two.

This explains Joe the Plumber. He made $40K in 2006, but in 2008 he was big-talking to Barack Obama about how we was gonna buy the business he works for--for a quarter of a million dollars.

This also explains how Joe and his co-delusionists could believe, for thirty years, that we could increase tax revenues by cutting taxes. Or that prayer would have any effect on any of this.

* NYT/CBS poll, March 3-14, 2005, question 24: Looking ahead, how likely is it that you will ever be financially wealthy? Would you say it is very likely [11%], somewhat likely [34%], not very likely [30%] or not at all likely [22%]?

Comments

[odograph]

Might this just be a pessimism about inflation?

[Steve Roth]

Odograph: I think you're suggesting that people think they might become millionaires, and that high inflation will make that goal more attainable. But the question asks if they think they'll become "wealthy." So it could be that they don't really realize how much money that requires, but expected inflation would only make it harder to achieve that status, not easier. Is that what you meant?

[odograph]

Sorry no, must have been skimming too fast. I actually thought they were asked if they'd become millionaires.